Comparable valuation under excise rules must use relevant market prices; an isolated old sale cannot set assessable value.

Molasses transferred to an adjacent sister unit for captive consumption could not be valued under section 4(1)(a) because no sale took place during the relevant period. Valuation therefore fell under Rule 6(b)(i) of the Central Excise Valuation Rules, 1975, which requires adoption of comparable goods produced by the assessee or by another assessee in the relevant time period. An isolated sale by the assessee made more than a year earlier was not treated as the nearest equivalent price. Comparable pricing data for public sector units in Andhra Pradesh was accepted as the relevant benchmark, and the assessable value of Rs. 500 per MT was upheld.

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Issues: Whether the assessable value of molasses transferred to an adjacent sister unit without sale was to be determined under Rule 6(b)(i) of the Central Excise Valuation Rules, 1975 by adopting the assessee's own stray sale price of the same goods made about twelve months earlier, or by taking the comparable price of other assessees in the relevant time period.

Analysis: The removals were stock transfers for captive consumption and, therefore, could not be valued under Section 4(1)(a) of the Central Excise Act, 1944. Since no sale price was available during the period of dispute, the case fell to be governed by Rule 6(b)(i) of the Central Excise Valuation Rules, 1975, which requires valuation on the basis of comparable goods produced or manufactured by the assessee or by any other assessee. The earlier stray sale by the assessee, being more than a year old, was not treated as the nearest equivalent price. The comparable evidence relied upon by the assessee, namely the price compilation for public sector units in Andhra Pradesh, was accepted as a reliable and relevant benchmark because the assessee itself was a public sector undertaking and price comparison had to be made within the same class or category of assessees.

Conclusion: The price of Rs. 500 per MT was rightly accepted as the assessable value, and the Revenue's contention based on the earlier sale at Rs. 2,400 per MT failed.

Ratio Decidendi: Under Rule 6(b)(i) of the Central Excise Valuation Rules, 1975, where goods are transferred without sale for captive consumption, valuation must be based on comparable goods of the same relevant class and time period, and an isolated prior sale remote in time cannot be treated as the nearest equivalent price.

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